I. & M. Smith (Pty) Ltd. since 1915
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I. & M. Smith (Pty) Ltd.

Coffee Market Report

09 Feb 2019
8th February, 2019.

The May to May contracts arbitrage between the London and New York markets narrowed yesterday, to register this at 36.27 usc/Lb., while this equates to 34.77% price discount for the London Robusta coffee market.

The Certified washed Arabica coffee stocks held against the New York exchange were seen to decrease by 1,580 bags yesterday; to register these stocks at 2,476,953 bags. There was a decrease by 3,245 bags to the number of bags pending grading for this exchange; to register these pending grading stocks at 56,133 bags.

The commodity markets had a mostly lower day yesterday, with renewed concern in the overall growth potential of EU economies highlighted, following the European Commission announcements. The lack of clarity surrounding the trade talks between USA and China added unease to sentiment and the US Dollar registered a firmer day against a basket of other major currencies. It was a lower day for the Oil markets, Sugar, Coffee and Cocoa, Cotton, Copper, Orange Juice, Wheat, Corn, Soybeans all lower on the day, Silver and Platinum registered lower while Gold recovered and Palladium finished in positive territory. The Reuters Equal Weight Continuous Commodity Index that is made up from 17 markets is 1.135% lower; to see this index registered at 398.67. The day starts with the U.S. Dollar steady and trading at 1.294 to Sterling, at 1.133 to the Euro and the U.S. Dollar buying 3.716 Brazilian Real.

The London market opened the day in mildly positive territory yesterday, New York followed with a start just below par. The morning session held steady in both markets in narrowly negative territory and in London relatively thin trading volume as Vietnam is anticipated to remain on the side line as the Tet New Year holiday week draws to a close. The generally softer sentiment within the macro weighed in as the day progressed and in New York spread trading added significant volume to pick up the pace held in a narrow range and just below par. The markets finished the day on a softer note but above the days’ low, within the middle of days trading range after a hefty volume day in New York, to set the close yesterday, as follows:

LONDON ROBUSTA US$/MT NEW YORK ARABICA USc/Lb.

MAR 1,547 - 9      MAR 104.30 - 1.20
MAY 1,566 - 7      MAY 107.30 - 1.25
JULY 1,582 - 7      JULY 109.85 - 1.30
SEPT 1,600 - 7      SEPT 112.55 - 1.30
NOV 1,617 - 8       DEC 116.30 - 1.30
JAN  1,634 - 8       MAR 120.05 - 1.30
MAR 1,654 - 8      MAY 122.45 - 1.25
MAY 1,673 - 8      JULY 124.55 - 1.30
JULY 1,689 - 8      SEPT 126.55 - 1.40
SEPT 1,707 - 8      DEC 129.00 - 1.95